1. Technical Field
This invention generally relates to lotteries, and more specifically relates to insurance sold in connection with lottery tickets.
2. Background Art
A lottery, in a broad sense, is a way of distributing prizes, including monetary awards, by chance or luck. One popular lottery format requires participants to risk a relatively small amount of money, often by purchasing a lottery ticket, in exchange for the chance to win a much larger sum of money. Conventional lottery tickets are associated with combinations of numbers, either pre-selected or chosen at the time of purchase, and winning tickets are those whose number combinations either completely or partially match a winning number combination. Tickets with complete matches are conventionally awarded a much larger prize than are tickets with partial matches. The maximum prize awarded for a completely matching number combination is often referred to as a jackpot. In this description of the invention, however, the word “jackpot” means any prize above a cutoff point, as defined below.
It is conventional for lottery operators to award a jackpot to a lottery winner only if the winner is willing to accept multiple installment payments consisting of portions of the total payout over a payout period. Payout periods of 20 or 25 years are not uncommon. If the jackpot winner elects not to receive installment payments, the only conventionally available alternative is to receive a lump sum payment immediately upon winning, where the lump sum payment is significantly less than the jackpot. This may be referred to as selecting a cash option. It is not unusual for the lump sum payment immediately available to jackpot winners-the cash option-to be no greater than half or roughly half of the jackpot amount. As used herein, the word “immediately,” when used to describe the timing for payment of lottery winnings, means within a reasonably short time, e.g., a few days, weeks or months, after a winning lottery ticket is identified.
It will be readily apparent to one of ordinary skill in the art that winners of certain non-jackpot prizes in a conventional lottery may be awarded their full prize amount immediately upon winning. The value of prizes immediately awarded in full may vary from one lottery to another, with $100,000 being considered a conventional cutoff point: prizes below that amount may conventionally be immediately paid in full; prizes above that amount may conventionally be subject to the cash option reduction. In this description of the invention, a “large payout” is one whose value is above a cutoff point, which may be $100,000 but may also be any other amount above which the lottery operators are not willing to immediately proffer full payment. A “small payout” is one whose value is below a cutoff point. The jackpot, by definition herein, is a large payout, i.e., is above the cutoff point for a particular lottery and is subject to the cash option reduction. It is to large payouts that the present invention particularly applies, and the phrase “winning ticket” herein means a ticket which is entitled to the jackpot or other large payout. The phrase “paying ticket” means a ticket that is entitled to some payout, without regard to whether it is large or small.
Regardless of the payout method selected by a lottery winner, taxes on the winnings may reduce the amount a winner actually realizes. Furthermore, if more than one lottery participant holds a ticket having the winning number combination in a conventional lottery, the amount a winner realizes is further diminished, because the total jackpot stays constant no matter how many winners there are. Whatever the reason for them, such reductions in realized prize money are upsetting to many lottery participants who find themselves with less money than they were anticipating when they purchased a ticket. Even if the lump sum distribution rules are known in advance to the lottery participants, many winners still experience disappointment at not receiving the full jackpot immediately upon winning.
Existing lottery methods address other sources of potential disappointment on the part of lottery winners. In one method, lottery participants bet that they will not select a winning number combination, but may wager an additional amount to ensure that if they do select a complete winning combination they will still be granted a prize as if they had wagered to win rather than lose. In another method, lottery participants may pay extra for the right to keep playing a lottery even after an event that would otherwise knock them out of the game. In still another method, lottery players may pay an additional amount to purchase a “never-lose” ticket that remains valid until it wins something, whether it be the jackpot or some smaller prize. None of the existing methods or inventions, however, address the issue of the inability of a lottery winner to immediately collect their share of the jackpot associated with winning a lottery.